Each of us has a unique relationship with our finances shaped by our upbringing, culture, generation, and more. These influences can change our perception of our finances and affect our choices – sometimes negatively.
When a person has a distorted or unhealthy perception of their financial situation, it can be considered a form of “money dysmorphia”. Although not a formally recognized psychological condition, the term is increasingly used to describe irrational beliefs or feelings about wealth, spending or financial stability.
If that sounds familiar, you may be wondering if you have money dysmorphia. Find out more about the signs and symptoms, and what to do if you're struggling.
Drawing similarities to mental health conditions from body dysmorphic disorder (BDD) — commonly referred to as body dysmorphia — money dysmorphia refers to a distorted perception of your financial situation that does not match reality.
For example, money dysmorphia can cause stress and anxiety about spending money, even though you earn enough to cover all your expenses. Or it can drive you to overspend and have a distorted view of what you can really afford.
Back to 2024 study conducted by Qualtrics on behalf of Intuit Credit Karma, 29% of Americans experience money dysmorphia, with younger generations more likely to report feelings of financial inadequacy (43% of Gen Z and 41% of millennials).
Money dysmorphia does not manifest in the same way in every person. Some key indicators that you may be struggling with money dysmorphia may include:
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Avoid checking your bank account balances, or checking your account balances constantly
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Max out your credit cards
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Constantly worried about not saving enough money
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Avoid spending any amount of money or making financial decisions because it causes you anxiety
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Feeling guilty or ashamed after spending money
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Feeling like you don't have enough money
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Constantly comparing your financial situation with others
Read more: Most Americans are dissatisfied with their savings, according to a survey
Regardless of how money dysmorphia may manifest, the consequences can be severe and far-reaching.
“The reality is that money dysmorphia can hold people back in both personal and financial ways,” says Han Lim Kim, a licensed clinical psychologist at Clarity Therapy NYC. “You may be losing or hurting relationships by avoiding spending on activities with friends and family and missing out on the joy associated with these interactions. You may be hoarding cash or just keeping money in a savings account, missing out on opportunities to invest properly.”
There is no single underlying cause of money dysmorphia. Knowing how to combat it will require you to do some work to find out where the disconnect is between the state of your money and your relationship with money.
If you think you're struggling with money dysmorphia, there are a few steps you can take to work towards solving it.
Pay close attention to your feelings about money. Note the causes when you feel most anxious. Does checking your bank account balance cause anxiety? Do you feel immediate regret after buying?
Identifying the moments when irrational or unnecessary feelings about money arise can help you implement the right strategies to ground yourself and adjust your perception.
Having a budget and a clear idea of your income and expenses each month can give you peace of mind and calm any fears you have about being able to pay your expenses each month or save for the future. Set aside time each month to review your account balances and track your progress toward future goals so that any feelings you have about money can be based on facts.
Read more: Your budgeting guide for 2025
Negative thoughts about money can lead you to adopt a scarcity mindset. Kim suggested reframing those thoughts to see your financial situation in a more positive light.
“Thoughts like 'I'm bad with money' or 'If I go out for dinner tonight, I'll never be able to retire' can be reframed by examining the facts and creating a more balanced perspective,” he said.
Instead, these negative thoughts can be modified to “I haven't learned how to budget yet, but I can start now,” or “that restaurant might be out of my budget, but I can suggest a more affordable option instead, ” she explained.
Financial advisers are not just for the rich; they work with all kinds of people from various economic backgrounds. Talking to a professional can help you get a clear idea of where your financial situation is and create a plan for achieving your goals, which can calm your financial worries.
Read more: What is a financial adviser, and what does it do?
“I worked with a client who told me that even though he knew he was going to be fine financially speaking, he always woke up every morning with a pit in his stomach that something terrible was going to happen,” said Michael Liersch, principal. advice and planning for Wells Fargo. “While it had benefited him when he started and built his business, he realized it was interfering with his ability to enjoy retirement and family. The core issue was that he didn't have a goal-based plan.”
Liersch explained that together they create a plan outlining his client's goals, assets and spending patterns, then project that over time. “That part ensured that the technical aspects of his financial life were covered,” he said. “But he also needed to feel psychologically safe.”
Liersch said that seeing the plan in digital format gave his client comfort every morning, knowing that if he was ever off track, he would know immediately so he could take action. “That put his mind at ease so he could live his life.”
Read more: 5 psychological coins to cut spending and increase savings